PMP Practice Question: Business Environment: strategy and project benefits
A project manager is leading a project that is aligned with the organization's strategic goal to increase market share. However, during execution, a competitor releases a similar product, reducing the expected benefits. What should the project manager do?
⚠ Common exam trap
Many exam-takers assume the strategic goal is fixed and ignore the need to reassess benefits when external factors change, leading them to choose Option B (continue as planned) instead of updating the business case for a governance decision.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Update the business case and present the revised benefits to the steering committee for a go/no-go decision.
The project manager must reassess the business case when external market changes (like a competitor's product launch) reduce expected benefits. Updating the business case with revised benefits and presenting it to the steering committee ensures an informed go/no-go decision based on current strategic alignment and value, as per PMBOK Guide's business case management and benefits realization processes.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Immediately stop the project to avoid further losses.
Why it's wrong here
Immediately stopping the project without a thorough re-evaluation of its business case and strategic alignment is a reactive decision that lacks a data-driven approach. Project termination, even when necessary, should follow a structured process involving updated financial analysis, risk assessment, and stakeholder consultation to ensure all implications are understood. This avoids potential loss of sunk costs without confirming the project's continued unviability.
- ✗
Continue the project as planned because the strategic goal has not changed.
Why it's wrong here
Continuing the project as planned, despite a change in the underlying conditions that impact its benefits, is irresponsible project governance. While the overarching strategic goal might persist, the project's ability to deliver the expected value or justify its investment may have significantly diminished. A re-evaluation of the business case is critical to ensure the project remains viable and aligned with current organizational priorities and resource allocation.
- ✓
Update the business case and present the revised benefits to the steering committee for a go/no-go decision.
Why this is correct
Updating the business case is the most appropriate action because it provides a formal mechanism to re-evaluate the project's financial viability and strategic alignment in light of new information. Presenting these revised benefits to the steering committee, which holds the ultimate authority for project governance, enables an informed go/no-go decision based on current data and organizational priorities. This ensures accountability and optimizes resource utilization.
- ✗
Add more features to differentiate the product from the competitor's.
Why it's wrong here
Arbitrarily adding more features to the product without a formal change control process is a significant risk, potentially leading to scope creep, increased costs, and schedule delays. Such a decision would bypass necessary impact analysis, stakeholder approval, and re-evaluation of the project's business case, which is essential for maintaining project integrity and delivering the intended value. This approach is reactive and lacks proper governance.
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